The COVID shutdown was an exceptional event. The consequences from the shutdown do have ripple effects; however, the strength of the underlying economic foundation is now coming back into focus as the rebound starts taking shape.
Last week most economic analysts were stunned by the 2.5 million jobs added to the economy in May. As we shared earlier, the result wasn’t so surprising when you consider the framework of the Paycheck Protection Program (PPP) worked exactly like President Trump and Treasury Secretary Mnuching planned. The incentives within the PPP program did what they were intended to do; small and mid-sized businesses retained or rehired their employees.

Inside the foundation of the Trump Main Street economy, the cement that binds the America-First policy, are a series of pre-established economic policies that specifically targets middle-class workers. The foundation is made strong by net wage gains and earnings amid mid-tier workers; those wage gains are made more important by policies that keep inflation in check.
Blue-collar workers, on average, were fortunately positioned to ride-out the COVID shutdown. With the shutdown over; Main Street now quickly fires back into action.
The demand for mortgage applications rose five percent last week, resulting in year-over-year growth over 13 percent. Again, this result stuns the experts. Demand for home purchases remains high and people are confident in their income security to make big decisions on home financing. The visible strength of Main Street cuts against the naysayers and doomsayers who thought the COVID shutdown would collapse the economy. It didn’t.
It did not, because (a) the shutdown was an exceptional event; and (b) the underlying foundation is stronger than the blow it took from the COVID sledgehammer.
(Via CNBC) “The recovery in the purchase market continues to gain steam, with the seasonally adjusted index rising to its highest level since January,” said Joel Kan, an MBA economist. “Purchase activity increased for the eighth straight week.”
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